Retirement is meant to be a positive experience. It’s your chance to ride off into the sunset and enjoy yourself after a lifetime of hard work. However, you must plan ahead if you want to get the most out of your post-work life. By following Resolvly’s four tips for planning a debt-free retirement, you can prepare for a better tomorrow.
1. Ditch Unsecured Debt
If you want to achieve a debt-free retirement, the first step is ditching unsecured debt. Simply put, unsecured debt is money owed that is not backed by collateral. Credit card bills, medical debt, and student loans are some common examples of unsecured debt.
Overusing credit cards or taking out high-interest rate personal loans are sure-fire ways to go into debt. Over time, the interest will compound and hinder your ability to build wealth. In addition, having higher amounts of unsecured debt will require you to create a larger emergency fund. Since most retirees are working on a fixed income, this extra debt gives them less wiggle room in the event of an emergency.
2. Pay Off Outstanding Student Loans
As noted above, student loans are a type of unsecured debt. However, consumers often regard them as different from other types of debt. While putting up the money for your child’s education is a noble cause, it is important that you pay off these loans before you enter retirement.
If your children are not yet in college, consider starting a college-specific savings plan. Setting aside money on the front end is much easier than scrambling to pay off tens of thousands in debt later.
3. Minimize Vehicle Debt
Vehicle debt is a form of secured debt. It is classified this way because the loan is “secured” by collateral, which is the vehicle in this case. While you may have been putting off buying that dream car until retirement, choose your purchasing approach wisely.
A major cost-saving option is to cut down to one vehicle. When both you and your spouse are working, two vehicles may be a necessity. But after you both call it quits, sharing a single vehicle is much more practical. You may even be able to pay for it in cash, which means one less monthly bill.
4. Work with a Consumer Protection Attorney
The tips we’ve listed so far are great places to start when planning for a debt-free retirement. However, consumers facing massive amounts of unsecured debt may feel overwhelmed. Fortunately, there is a solution for them, as well.
Many consumers are unaware of the benefits of working with a consumer protection attorney who specializes in debt relief. These attorneys ensure that debt collectors do not violate your consumer rights. They can help you settle your debt, and in some cases, they can wipe out your unsecured debts entirely.
With that said, every case is unique. Regardless of the complexity of your financial situation, a consumer protection attorney will help you navigate the legal process. Take control of your financial future and consider partnering with a debt resolution specialist today.
About Resolvly LLC
Resolvly is a lawyer referral service approved by the Florida Bar that helps clients nationwide connect with consumer protection attorneys who specialize in debt resolution. Founded in 2015, the Boca-Raton-based company has become an industry leader by helping thousands of Americans find the right legal-based solution to reduce or eliminate their unsecured debt.
We are devoted to helping our clients reach true financial freedom. The company can assist with all types of unsecured debt, including credit cards, medical bills, personal loans, private student loans, business debt, and vehicle repossessions.